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Poster: Mandojammer Date: Jun 8, 2010 9:17am
Forum: GratefulDead Subject: Re: Lazy Journalism (non Dead)

Micah -

I'm even later with the response - damn 3 day weekends.

It's pretty easy actually. Article I, Section 8 of the Constitution gives Congress the authority to "coin money, regulate the value thereof, and of foreign coin, and fix the standard of Weights and Measures." It also says that Congress will have the power to "borrow money on the 'credit' of the United States.

If the money was originally created as sovereign credit, borrowing against something that already has value is easy. We would also need to change the fractional banking system to actually require the banks to hold more of the sovereign credit money that is deposited. The problem we are all now familiar with is when you take existing debt and come up with derivatives of the original debt, and then create more derivatives.

So if this money were created as sovereign credit - meaining it would have to be used to "buy" things - it would then circulate as money with purchasing power. Instead, for whatever reason, money today is loaned into existence as interest bearing debt, or a claim on someone's future labor. By itself that might be okay except Congress abdicated their responsibility for oversight of this process and gave it a central banking system known as the Federal Reserve. There is nothing 'federal" about the Fed. We desperately need to shine a bright light on that den of cockroaches.

All that said, I don't think the framers of our Constitution ever envisioned a Congress so inept that collectively they couldn't pour piss out of a boot if the instructions were written on the sole.